U.S. Lawmakers at a Crossroads On Chinese Solar Panels

The Lede: U.S. lawmakers are debating the role of solar panels from China in the American climate agenda and the future of the domestic solar industry. The House is expected to vote on a new resolution on solar panel tariffs from China at the end of March.

What We Know:

• An investigation by the Commerce Department found that China was circumventing U.S. tariffs on solar panels by shipping their products through Cambodia, Malaysia, Thailand, and Vietnam.
• Both chambers of Congress have introduced a resolution aimed at overturning the Biden administration’s suspension of tariffs on solar panels from the four Southeast Asian countries.
• The Solar Energy Industries Association which represents more than 1,000 U.S. solar companies, has estimated that the resolution would force firms to eliminate 30,000 well-paying jobs, including 4,000 manufacturing jobs.

The Background: The Energy Department has forecast that solar energy will need to grow by at least 37 percent of the total power mix by 2035 to achieve clean-energy goals, especially the goal of 100 percent clean electricity by that year. Currently, the U.S. has no significant manufacturing capacity while China controls more than 80 percent of the solar supply chain. U.S. solar power relies on the manufacturing capacities in Asia on the energy transition path. The Inflation Reduction Act seeks to close the manufacturing gap by providing incentives for domestic manufacturing, but the industry insists that it needs two more years to achieve its goals. There have also been concerns surrounding the alleged use of forced labor in the Uyghur-populated region of Xinjiang.

Likely Outcomes:

• Democratic lawmakers are split between whether to uphold U.S. trade tariffs and put pressure on China or support the American solar industry and stay the course on the path toward climate goals. They must also weigh their support for Biden administration policies.
• Those on the side of the solar industry and climate activism will likely push for the Biden administration’s suspension for two years until the U.S. industry can get on its feet and the country can continue on its climate objectives.
• Pressure on China will be pursued in other areas where the U.S. views a decisive competitive advantage, including in its military rivalry.

Quotables:

• “We cannot allow foreign solar manufacturers to violate trade law, especially when it comes at the expense of American workers and businesses.” - Daniel Kildee, Democratic Representative from Michigan
• “We really shouldn’t be doing anything that is slowing down solar deployment when we have to accelerate.” - Tom Erb, Climate Policy Director for Democratic Representative Scott Peters from California
• “We have a major solar presence in Ohio. But I’ve led around here for my whole career against bad trade agreements that essentially have industrialized China … and I want to balance that towards the immediacy of jobs here. So I don’t know how that’s going to play out.” - Sherrod Brown, Democratic Representative from Ohio

Good Reads:

Should China be allowed to duck tariffs on solar panels because the U.S. needs them badly? Democrats are divided. (Washington Post)

U.S. solar panel imports from China grow, alleviating gridlock, officials say (Reuters)

US releases a third of electronics detained under China forced labor law, data shows (Yahoo! Finance)